In recent years, there has been a steady proliferation of loyalty, coupon and rebate programs offered to consumers. There are a variety of different models on which such programs are based, but a common feature is that they offer an incentive (in the form of points or other non-monetary items) designed to encourage customers to conduct business with one organization rather than with competitor organizations. In the case of loyalty programs, they often take the form of point systems in which a customer is credited or rewarded with a number of points for each transaction and is entitled to later exchange or redeem accumulated points for goods and/or services.
One longstanding example is the loyalty system used in the airline industry. An airline typically offers a number of points to each consumer that is correlated with the distance traveled. At certain levels, the points may be exchanged by the consumer for airline tickets.
Sometimes, customers receiving loyalty points may not want to redeem them for transactions with the issuing entity. As an example, a traveler receiving air travel points from one airline may rarely travel with that same airline and thus have no occasion to redeem the points in the future. Such points may have value (assigned by the issuer or by market trading), but the issuer may not have a mechanism in place to permit the points to be exchanged for cash, particularly at times to suit the needs of the customer. Systems for transferring points (and receiving value in return) are either not readily available, or are not convenient to use.
Thus, there is a general recognition in the industry of a need for loyalty-based and other systems that permit redemption of loyalty points or the like into cash.